Obama caves in to for-profit colleges on rules
The Obama administration on Thursday issued a series of highly anticipated regulations aimed at cracking down on for-profit colleges and other career training programs that leave students saddled with unmanageable debts and contribute to an unequal share of federal student loan defaults.
The final rules issued by the Department of Education, however, are significantly less stringent than a draft version released last year, giving college programs an additional three years to come in line before possibly losing access to lucrative federal student aid dollars. The changes come after an unprecedented lobbying and campaign finance offensive over the past year by the for-profit college industry, which derives a vast majority of revenues from federal student loan and grant programs and has sought to protect that income by gaining influence in Washington.
My advice: Do NOT take any student loans with anyone unless you speak with someone who can explain to you exactly what you are getting into and you have found the institution's current placement and payback history. My nephew was just approached for an outrageous scam, a "sound tech" school -- you know, the guys who become roadies and set up the stages for traveling performers. This "school" wants him to borrow OVER $80,000 (that's right EIGHTY THOUSAND DOLLARS) for a "career" that involves sporadic work and usually requires no real education to enter anyway.
Bottom line is that, until proven otherwise, you should treat all for-profit, private educational institutions like a time-bomb that someone is trying to strap to your back. It's not even clear that student loans make sense anymore for public, nonprofit institutions, but at least their business model isn't 100% dependent on the flow of student loan monies.